ERP SaaS: Three Moves Worth Noting

oracle-sap-netsuite-saas-erp1Enterprise Resource Planning. To most customers, those three words mean "complexity." But there are signs ERP deployments are finally starting to benefit from the SaaS (software as a service) craze. Just this week, we've spotted major SaaS developments involving NetSuite, Oracle and SAP. But can smaller MSPs really participate in SaaS-driven ERP?

First the news:

  • SAP has named SunGard a hosting partner in the US
  • Oracle announced a SaaS partner strategy for ISVs (Channel Chief Judson Althoff describes Oracle's SaaS strategy in this podcast)
  • And NetSuite, the pure-play SaaS company, announced plans to push deeper into SAP's home market of Germany
The ERP SaaS moves won't end there. It's safe to expect Microsoft to make major SaaS announcements during the Microsoft Worldwide Partner Conference 2009 (here's all of our WPC09 coverage) in New Orleans (July 13-15).

SunGard and SAP

So, where can managed service providers play in the SaaS ERP market? Consider the situation at SunGard.

Earlier this week, SAP named SunGard a certified hosting provider after assessing the company’s infrastructure, procedures and technical staff. SunGard said it provides the following managed application services for SAP: infrastructure design, deployment and migration, management, administration, monitoring, reporting and ongoing support.

SunGard had been offering SAP services prior to certification. The company formalized its managed SAP services offering in January 2007, according to Janel Ryan, product manager at SunGard Availability Services. SunGard acquired a company a few years ago that extends its experience in managing SAP environments dating back to 1998.

Ryan said SunGard has seen, and continues to experience, a steady demand for managed SAP services. The partnership with SAP, she added, will “increase the demand for new implementations.”

SunGard cultivates partnerships with both traditional software vendors and  software-as-a-service providers. The company’s offerings include managed Microsoft SQL and Oracle databases, managed Oracle E-Business Suite services, and managed Citrix services.

HarrisData, meanwhile, repackages SunGard’s managed services as part of its SaaS offerings. The company uses SunGard’s hosting, network, managed security, and storage services to support three of its applications.

SAP Wakes Up to SaaS

SAP, for its part, has been expanding its roster of hosting allies. In the past year or so, SAP has entered hosting alliances with Computer Sciences Corp, Savvis, and Secure-24.

Hosting represents a growth segment for SAP. Pierre Audoin Consultants in a May report noted a decline in SAP’s license business in Q1, but noted that SAP outsourcing, hosting and application management “could benefit from the gloomy economic situation.”

But Pierre Audoin Consultants also stated that hosting and application management are subject to pricing pressure, noting that those areas have become commodity services for the most part. The consulting firm noted that differentiation “will only be possible on a price or innovative price-and-billing-model basis.”

Oracle, NetSuite Make Moves

Meanwhile, Oracle is finally formalizing some SaaS software licensing programs -- which should allow SaaS-focused ISVs to "pay as they go" for Oracle software. This podcast with Oracle's Althoff explains the strategy a bit more.

NetSuite also caught our attention this week. The company's OneWorld suite has earned financial certification in Germany. That's not "big news" for North American MSPs. But there's a deeper story here.

NetSuite's move into Germany -- home of SAP -- symbolizes SaaS ERP's continued global expansion. MSPs can either ignore the trend, or try to figure out a way to cash in.

Contributing blogger John Moore covers Master MSPs, Web hosts and emerging opportunities. Additional reporting by Joe Panettieri. Follow MSPmentor via RSS; Facebook;; and Twitter. And sign up for our Enewsletter; Webcasts and Resource Center.
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